Introduction to Derivatives Trading
Derivatives trading on YUBIT allows traders to speculate on the price movements of cryptocurrencies without directly owning the underlying assets. The most popular product is the perpetual contract, which has no expiry date and provides opportunities to profit in both rising and falling markets.
1. What is Derivatives Trading?
Derivatives are financial contracts whose value is based on an underlying asset, such as BTC or ETH. In YUBIT’s case, this mainly refers to perpetual contracts, which are settled in USDT and can be held indefinitely.
2. Key Features of Derivatives Trading
Leverage – Amplify both profits and losses by controlling a larger position with smaller capital.
Long & Short Positions – Go long if you expect the price to rise, or go short if you expect the price to fall.
Perpetual Contracts – No expiry date, positions can be held as long as margin requirements are met.
Funding Rate – A mechanism that balances payments between long and short traders to keep contract prices aligned with spot markets.
3. What is Margin?
Margin is the collateral you must deposit to open and maintain positions. YUBIT supports two margin modes:
Cross Margin – Margin is shared across positions, reducing the risk of forced liquidation.
Isolated Margin – Margin is limited to a single position, allowing you to strictly cap potential losses.
4. What is Leverage?
Leverage allows traders to magnify their exposure. For example, using 10x leverage means a $1,000 margin deposit controls a $10,000 position. This increases both profit potential and risk of loss.
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